Budget 2011: Oil amp; Gas Tax changes

As many Stockopedia readers have investments linked to North Sea oil and gas assets, it seems worth examining the changes announced in the Budget in some detail.
Those details can be found in the 240 page budget overview (tax simplification, anyone?). Here is what I've found:

Starting with page 3:

Oil and Gas Taxes
1.13 Supplementary charge — Legislation, effective from 24 March 2011, will be introduced in Finance Bill 2011 to increase the rate of the supplementary charge levied on profits from UK oil and gas production from 20 per cent to 32 per cent. As part of the fair fuel stabiliser, if in future years the oil price falls below a set trigger price on a sustained basis, the Government will reduce the supplementary charge back towards 20 per cent on a staged and affordable basis while prices remain low. The Government believes that a trigger price of US $75 per barrel would be appropriate, and will set a final level and mechanism after seeking the views of oil and gas companies and motoring groups. A Tax Information and Impact Note for this measure is available at Annex A. Chapter 3 includes further information on North Sea oil taxation.

Related

VICTORIA — The issue of a liquefied natural gas tax is set to heat up debate during British Columbia’s fall legislative session, but the potentially controversial issue of emissions controls on LNG are also part of the package.
Finance Minister Mike de Jong said the Liberal government plans to introduce two separate pieces of legislation focusing on LNG — covering taxes and emissions reporting.
De Jong said the tax legislation will be tabled within the next two weeks and the emissions reporting bill is due in late October.

UK Independent -- "North Sea oil production has slowed to its lowest level since records began 15 years ago following the Chancellor of the Exchequer's recent tax raid on the industry. An update from the U.K.

Crude oil production set a new record despite the declining rig count in the North Dakota region. The total rigs in North Dakota are 158, after declining by 23 since December last year. The 158 rigs are considered to be the lowest in five years.

Oil companies are lobbying Chancellor George Osborne to have North Sea taxes slashed from 80% to 30% as the oil price collapse puts production under threat. Since June last year the price of benchmark Brent crude oil has fallen over 50% from $117 a barrel to below $50 a barrel today.

Canadian heavy crude traded below US$40 a barrel for the first time in five years just as surge of new projects are scheduled to start operation.
A total of 14 new oilsands projects are scheduled to start next year with a combined capacity of 266,240 barrels a day, according to data published by Oilsands Review. That’s 36 per cent more than was started in 2014.

The discovery of North Sea riches in the 1970s planted the seed of modern-day Scottish nationalism as supporters of independence cried “It’s our oil!”
Four decades later, nothing will be more important to the economic future of Scotland than the oil industry should the country vote to end the 307-year union with the rest of the U.K.

BP Plc kicked off the results season for top global oil firms on Tuesday with forecast-beating profits and a dose of what the industry’s investors want – a dividend hike, plans for asset sales, and a promise to keep a lid on spending.
The world No. 5 among investor-controlled oil and gas groups worldwide scaled back its guidance on capital spending next year to $24-$25-billion compared with previous guidance of $24-$27-billion for the years up to 2020.

We were over at the Reuters live Budget Blog earlier discussing this year's budget. In summary, it was a fiscally neutral budget, reflecting the spending constraints that the Government is under. In terms of OBR forecasts, 2011 growth has been downgraded from 2.1% to 1.7%, while inflation is expected between 4% and 5% in 2011, falling to 2.5% in 2012.
The big news was the cut in corporate tax, with the Chancellor aiming to make Britain the most competitive country in the G20.